TOP SECRET

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TOP SECRET
BRIEFING (FOR INTERNAL USE ONLY) WAR-GAME
on ERECTILE DYSFUNCTION
CONFIDENTIAL
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TABLE OF CONTENTS
1. WAR-GAME AGENDA 2. WAR-GAME PROCESS 2.1
INTRODUCTION 2.2 WAR-GAME OBJECTIVES 2.3 THIS
BRIEFING BOOK 2.4 TEAMS 2.5 TEAM EXERCISE 3.
ERECTILE DYSFUNCTION (ED) 3.1 DISEASE
OVERVIEW 3.2 EPIDEMIOLOGY 3.3 ED TREATMENT 4.
E.D. MARKET INFORMATION 4.1 EPIDEMIOLOGY 4.2
SALES IN THIS MARKET 4.3 MARKET REGULATORY
ENVIRONMENT 4.4 SALES FORCE PROMOTIONAL COSTS
4.5 ED PRODUCTS INFORMATION 4.5.1 VIGOR team
Viagra 4.5.2 COYOTE team Cialis 4.5.3
LEOPARD team Levitra 5. COMPANY PROFILES 5.1
The Pfizer VIGOR team 5.1.1 Overview 5.1.2 ED
product 5.2 The Lilly COYOTE team 5.2.1
Overview 5.2.2 ED product 5.3 The Bayer Schering
LEOPARD team 5.3.1 Overview 5.3.2 ED product 6.
SUMMARY DOCUMENTS 7. TEAM EXERCISE AND
TEMPLATES 8. INFORMATION SOURCES
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1. War Games Agenda
To be confirmed at the outset of the War Game
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2. War Games Process
2.1 INTRODUCTION Pfizer led the erectile
dysfunction (ED) market with Viagra from its US
launch in 1998. In 2004, came Bayer Scherings
Levitra and Lillys Cialis, with Cialis
claiming longer term efficacy. Ten years on,
Viagras number one spot is now threatened, even
overtaken, in many markets, including the US (for
example, in 2008, Viagra sales in the 7 major
markets were less than US1billion, compared to
over 1.4 billion in 2003.) Pfizer management has
decided to invest in a business war-game format
to test alternative strategies against Levitra
and Cialis in the light of its launch soon of a
formulation which will match Cialis one for the
weekend claim and regain leadership in ED
treatment.

• 2.2 WAR-GAME OBJECTIVES
• Business war-gaming is an innovative strategic
  planning tool that explores future options before
  entering into any commitments.
• War-gaming represents a safe way for management
  to
• Test the viability and suitability of its
  strategy in the context of a changing
  environment.
• Understand the effects of its strategy on the
  market and against its competitors.
• Get a broad acceptance of its strategy within the
  firm as a result of the involvement of all key
  managers involved into the concerned business.
• Have a deeper and broader understanding of the
  market and its potential opportunities.
• War-game will involve 18 participants organized
  in three teams, each one representing a main
  contender for ED market leadership.

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2. War Games Process, continued

• 2.3 THIS BRIEFING BOOK
• This briefing book is to help you to be prepared.
  This book describes a virtual market
  competitive situation, using realistic data
  collected through desk research. Because time
  will be very limited, we strongly recommend you
  read it before the event.
• The book is divided into six parts.
• Agenda of the war-game.
• Description of the war-game process.
• Summary of the disease and the treatments
  available.
• Market information.
• Companies profiles and products that will
  compete during the game.
• Tables that summarize the market parameters.

2.4 THE THREE TEAMS Three teams of about 6
participants will compete against each other
Team VIGOR will represent Viagra, Team COYOTE
will represent Cialis and Team LEOPARD will
represent Levitra. After defining initial market
strategy, each team will present one scenario.
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2. War Games Process, continued
2.5 TEAM EXERCISE Michael Porters analysis The
framework you will use to analyze your company is
Michael Porters Competitor Analysis Model (shown
below), which integrates goals, assumptions,
current strategy and capabilities. The
facilitators will give you more information about
this model during the pre-game briefing.
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2. War Games Process, continued
2.5 TEAM EXERCISE (Continued) Each team will
perform an analysis of the company it represents.
Teams should focus on their own companys goals,
assumptions, strategy capabilities based on the
information in this book. This will help you to
define future strategy, based on your teams
decisions. Each team will present their companys
analysis in front of the other teams. You need to
be prepared to defend your strategy. Once all
teams finish presenting/defending their companys
analysis, they will re-group to clarify/adjust
their strategies, taking into account issues and
queries raised by the other teams. In the
interest of time, teams will not present strategy
adjustments. Additional Scenarios Response
While you will refine your strategy in groups,
the facilitators may add scenario adjustments.
Each team will then define their modified
strategy that responds to the market events
reflected in the scenario. Teams should consider
likely reactions of the other teams. We will
conclude the war-game exercise by assessing the
main takeaways of the war-games solution based
on recent past experiences.
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3. Erectile Dysfunction

• 3.1 DISEASE OVERVIEW
• Erectile dysfunction, also known as impotence, is
  the consistent inability of a man to get and/or
  maintain an erection sufficient for satisfactory
  sexual activity.
• ED cases may be due to physical, psycho-social
  and lifestyle factors
• Physical vascular diseases, diabetes, nerve
  disease, hormonal problems, surgery, trauma,
  chronic disease.
• Psychosocial performance anxiety, stress,
  depression, relationship problem.
• Lifestyle alcohol, sedentary lifestyle, smoking.
• The severity of ED ranges from mild to severe
  (complete loss of function). Men affected by ED
  may experience low self-esteem, performance
  anxiety, depressed moods, stress, guilt and
  relationship conflicts.

3.2 EPIDEMIOLOGY More than 50 of men between the
ages of 40 and 70 can experience ED to some
degree. Erectile dysfunction has been reported to
affect 152 million men worldwide and 5-10 only
are medically treated. In 2004, about 7 of men
worldwide between the ages of 56 and 65 were
prescribed drugs for ED, compared with about 5
for men older than 65. Erectile dysfunction is a
medical condition and not necessarily just part
of getting older. This issue occurs in younger
men as well. Today, experts estimate that 85 of
ED has an underlying medical cause.
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3. Erectile Dysfunction Continued

• 3.3 ED TREATMENT
• There are three modern, oral drugs for ED
  treatment
• Viagra (sildenafil citrate).
• Cialis (tadalafil).
• Levitra (vardenafil hydrochloride).
• These drugs should be prescribed only after a
  thorough medical history and examination to
  diagnose the cause of the impotence/ED and other
  related factors, as well as to discuss the
  potential risk of a heart attack.
• Men taking additional nitrate drugs, often used
  to control chest pain (angina), should not take
  ED drugs as such combinations can cause blood
  pressure to fall to an unsafe level.
• All these drugs are taken orally prior to planned
  sexual activity, to increase blood flow in the
  penis in response to sexual stimulation.
• Efficacy is c.70 with all 3 drugs - although
  their marketing efforts try to enhance this.
• Side effect profiles are similar, except that
  blue discoloration of vision is seen only with
  Viagra and muscle aches only with Cialis.
  Vasodilatory side effects (headaches, nasal
  congestion, flushing) are common with all but are
  mild (e.g. rarely caused men to drop out of
  trials). All three carry similar
  contra-indications.

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4. Market Information
Note This market was created for this game it
does not reflect any real country and info has
been created through desk research. For a
real war-game, as much data would be collected
in the relevant region to provide a
representative, realistic market picture.
4.1 EPIDEMIOLOGY Total country population 2006
48 million Age structure 0-14 years 19.4 (male
4,952,177 / female 4,450,821). 15-64 years 72
(male 17,715,267 / female 17,147,808). 65 years
and over 8.6 (male 1,670,971 / female
2,485,600).
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4. Market Information Continued
4.2 SALES IN THIS MARKET Total sales of
treatments for ED are US64m in 2008 (20 growth
v 2007). Total ED drugs sales could reach US100m
in 2012. In this market, Cialis and Levitra
were launched in 2005 and 2007 respectively. Local
KOLs feel ED drugs sales will continue to
increase, albeit more slowly, as the population
ages and diseases like diabetes, which can lead
to impotence, become more common.
Table 1 ED products sales in US dollars
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4. Market Information Continued
4.3 MARKET REGULATORY ENVIRONMENT The environment
is typically a reimbursed one where the
responsible government agency decides which drugs
are reimbursed, fixes prices and defines the
clinical criteria for patients to fulfill to be
eligible for reimbursed treatment. The three ED
drugs are not reimbursed except in rare situations
Table 3 Reimbursement level of ED products
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4. Market Information Continued
4.4 SALES FORCE AND PROMOTIONAL COSTS Sales Force
and Promotion costs for this market are in this
country are shown in table 4 below.
Note that in this market, direct-to-patient
promotion is not legal
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4. Market Information Continued
4.5 ED PRODUCTS INFORMATION 4.5.1 Team VIGOR
Viagra
Key sales message Keep that spark alive with
Viagra. Get an on-line voucher for Starter Pack
from local retail pharmacy with first Viagra Rx.
Starter Pack comes with 6x50-mg or 4x 100mg
tablets of Viagra. Value card After paying
for 6 eligible Viagra prescriptions, 7th is
free. TV advertising with current (mature) soccer
star talking about ED New formulation (launch in
10m) likely to be effective in many men for up
to 48 hours
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4. Market Information Continued
4.5 ED PRODUCTS INFORMATION 4.5.2 Team COYOTE
Cialis
Key sales message Relax and take your time with
36 Hour Cialis. Nicknamed weekend because one
dose effect supposedly lasts entire
weekend. Cialis Promise Card If you like
Cialis, Lilly will pay for another free Cialis
sample. If you don't, Lilly will pay for a sample
of ED tablet of your choice. TV ad shows a man
and woman in outdoor sun in his-and-her bathtubs
contemplating countryside the voiceover explains
ED and a window of opportunity.
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4. Market information Continued
4.5 ED PRODUCTS INFORMATION 4.5.3 Team LEOPARD
Levitra
Key sales message Levitra helps to get and
keep a quality erection. Previous TV ad with top
ex-soccer player talking about ED and the need
for fast onset of action (you dont need to
plan for sexual activity and thus it can all be
more natural) and safety of faster removal
from system.
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5. Company Profiles
5.1 Pfizer VIGOR team 5.1.1 Overview Headquarte
red in the USA Pfizer develops, manufactures and
markets leading medicines for humans and animals
in more than 150 countries. Sales US48bn in
2007. Viagra 3.7 (US1.8bn) of total Pfizer
sales in 2007. The company focuses on three
business segments Pharma prescription drugs
for CV metabolic diseases, CNS disorders,
arthritis pain, infectious respiratory
diseases, cancer, eye disease, endocrine
disorders and allergies. Consumer healthcare
self medications for oral care, upper respiratory
health, tobacco dependence, GI health, skin care,
eye care and hair growth. Animal health
treatments for diseases in livestock and
companion animals. Other manufactures empty
soft-gelatin capsules, contract manufacture, bulk
pharma chemicals and diagnostics. 5.1.2 ED
product Viagra Active ingredient sildenafil
citrate. Form Film-coated tablets for oral admin
in 25mg, 50mg 100mg sildenafil citrate. Dosage
Recommended starting dose 25 mg. Indication
Viagra is an oral prescription medicine for
treatment of ED in men. Recommended time to take
before sexual activity is 60 minutes Side
effects Headache, facial flushing, altered or
bluish vision.
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5. Company Profiles Continued
5.2 Lilly COYOTE team 5.2.1 Overview Headquarte
red in the USA, Lilly is a global pharmaceutical
and related healthcare products company. Eli
Lilly products treat depression, schizophrenia,
diabetes, cancer, osteoporosis and many other
diseases. Sales in 2007 US18 billion Cialis
6.3 (1.15 billion) in 2007 Eli Lilly employs
more than 41,000 people worldwide, with more than
7,600 in research and development, and market
their medicines in 158 countries. Lilly has major
research and development facilities in nine
countries and conducts clinical trials in more
than 60 countries. 5.2.2 ED product
Cialis Active ingredient tadalafil. Form
Film-coated tablets for oral administration in
5mg, 10mg and 20mg tadalafil. Indication Cialis
is an oral prescription medicine for the
treatment of ED in men. Recommended time to take
before sexual activity is 30min to 12
hours. Dosage Recommended starting dose 10
mg. Side effects Headache, indigestion, back
pain, muscle aches, flushing and stuffy or runny
nose.
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5. Company Profiles Continued
5.3 Bayer Schering LEOPARD team 5.3.1
Overview Bayer Schering Healthcare Headquartered
in Germany, Bayer Schering Pharma is an
independent operating subgroup of Bayer AG and
employs more than 38,000 people in over 100
countries. Sales US15.9 in 2007. Levitra
3.1 (US495m) Bayer Schering comprises six
divisions Animal Health, Consumer Care, Diabetes
Care, Diagnostics and Pharmaceuticals. 5.3.2 ED
product Levitra Active ingredient vardenafil
hydrochloride. Form Film-coated tablets for oral
administration in 2.5 mg, 5 mg, 10 mg and 20 mg
of vardenafil. Indications Levitra is an oral
prescription medicine for the treatment of ED in
men. Recommended time to take before sexual
activity is 20 to 25 minutes. Dosage The
starting dose of Levitra is 10 mg taken no more
than once per day. Side effects Headaches,
flushing, stuffy or runny nose.
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6. Summary
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6. Summary Continued
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Team Exercise and Templates
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Team exerciseCase study

• War-game erectile dysfunction
• The framework that you will use to analyze your
  company is Michael Porters competitor analysis
  model. Your team should focus on your companys
  capabilities, future goals and future strategy
  based on the information in the war-game book.
  Facilitators will provide you at the event with a
  Michael Porters analysis template (PowerPoint
  format). This exercise will help you to define
  your future strategy.
• Each team will present their Michael Porter
  analysis in front of the other teams. Your team
  should be prepared to defend your chosen
  strategy.
• Once all teams finish presenting and defending
  their analysis, you will regroup to clarify and
  adjust your strategies taking into account issues
  and queries raised by other teams.

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Team exercisePfizer the pressing event to be
tackled

• Lilly will present trial data at a major,
  international andrology congress in 3 months
  time proving that a high percentage of men with
  ED, including ex-Viagra users, strongly preferred
  Cialis to Viagra because of its longer, more
  predictable duration of action, thence its
  greater suitability to real life.
• Results were derived from a 6m study of 750 men
  who completed the trial it will be presented at
  the meeting by one of the gurus of ED
• However, Pfizer has the new long-acting
  formulation up its sleeve with some very
  compelling new clinical data, including superior
  QOL results

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Team exercise Recap

• Michael Porters analysis model

Competitive Strategy, Michael Porter
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Team exerciseMichael Porters analysis model

• Future goals What are the company objectives?
• At all levels of management and in multiple
  dimensions.
• In the short and long term.
• The diagnostic of future goals will allow
  prediction about whether or not each competitor
  is satisfied with its present position, how
  likely that competitor is to change strategy and
  the vigor with which it will react to outside
  events or moves by other firms.
• Assumptions What does the company believe about
  itself, the industry and the other competitors?
• What does the company appear to believe about its
  relative position in cost, product quality,
  technological sophistication, and other key
  aspects of its business?
• What does the company appear to believe about
  future demand for the product and about the
  significance of industry trends?

Competitive Strategy, Michael Porter
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Team exerciseMichael Porters analysis model
(Cont)

• Current strategy What is the company doing?
• How the company is currently competing?
• What are the differences between the companys
  products and its rivals?
• Capabilities What can the company do?
• What are the strengths and weaknesses of the
  company and the product?
• Are there any probable changes in those
  capabilities over time? Will they increase or
  diminish?
• Future strategy What the company should be
  doing?
• What are feasible strategic alternatives? Is
  current strategy one of these?
• Which alternative(s) best relate companys
  situation to external opportunities threats?

Competitive Strategy, Michael Porter
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Team exerciseTemplates

• Assumptions
• We (Pfizer) did/could not anticipate the new
  Cialis trial would be as positive, and thus as
  potentially impactful, when it started. We now
  believe this new data is a serious threat and
  could have a real impact on Viagras Brand image,
  market share and the new product launch
• . Others

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Team exerciseTemplates

• Current strategy PFIZER - TEAM/VIGOR
• Product Emphasizing the experience safety of
  Viagra worldwide with high impact sales force and
  small meetings promotion to carry the message
  home
• Price Market price, although a key part of the
  pricing strategy is to make deals that promote
  loyalty among users of Viagra
• Promotion Heavyweight sales and small meetings
  focused on local specialists who will come out in
  their support of Viagra
• Other Targeted on Viagra prescribers and lapsed
  Viagra prescribers

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Team exerciseTemplates

• Capabilities Define the strengths weaknesses
  of your company your ED product.

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Team exerciseTemplates

• Future goals State the goals for short term
  (2010) and long term (2014) of your company for
  your ED product

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Team exerciseTemplates

• Future strategy State your future strategy for
  short term (2010) and long term (2014).
• Product
• Price
• Promotion
• Other

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7. Information Sources
Viagra http//www.viagra.com/ http//www.globalch
ange.com/viagra.htm Cialis http//www.cialis.com/
index.jsp http//www.coreynahman.com/1125cialis_pr
ice_comparison.html Levitra http//www.levitra.co
m/ http//www.coreynahman.com/levitra_Information.
html Pfizer http//www.pfizer.com/pfizer/main.jsp
Eli Lilly http//www.lilly.com/ Bayer Schering
Healthcare http//www.bayerhealthcare.com/8.0.html
?L2 http//pharmalicensing.com/company/showall/9
375 Other http//www.drugstorebestbuys.com/resourc
es/compare.htm http//www.usrf.org/news/030303_PDE
5_inhibitors/030303_PDE5_inhibitors.html http//ww
w.usrf.org/ForbesArticle.html http//www.usrf.org/
news/26JAN04_levitra/levitra.html http//www.andro
logy.com/ http//www.nytimes.com/2005/12/04/busine
ss/yourmoney/04impotence.html?ei5088en197ef4094
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